What the Sykes Holiday Letting Outlook Report 2026 Tells Owners of Larger Holiday Homes and Group Accommodation Venues.
Sykes Holiday Cottages has published its annual Holiday Letting Outlook Report for 2026, drawing on internal bookings and revenue data from more than 23,500 UK holiday rentals alongside a consumer survey of 500 holiday let owners. The report covers income trends, regional performance, booking behaviour, and how owners are responding to regulatory changes.
Much of the analysis focuses on the broader holiday let market, including one to three-bedroom cottages in popular tourist areas. But there is plenty in the data that matters specifically to owners of larger properties: the kind of four- and five-bedroom houses, converted barns, manor houses and estates that accommodate groups of eight or more.
Larger Properties Earn More — And The Gap Is Widening
The headline figure from the report is that the average UK holiday let generated £25,600 in gross income in 2025, up from £24,700 in 2024. That is the market-wide average. The more interesting story lies in the breakdown by property size.
It might seem obvious that bigger properties earn more, but what attracted our interest at GroupAccommodation.com is laid out below.
One-bedroom properties averaged £16,800 in gross income. Two-bedroom properties reached £21,000. Three-bedroom properties came in at £25,600 — roughly in line with the overall average, which makes sense given that three-bed cottages represent the bulk of the market. Four-bedroom properties, however, averaged £36,000. Five-bedroom properties reached £48,200.
That five-bedroom figure is nearly double the market average, and almost three times the income generated by a one-bedroom property. What’s more interesting, though, is the average RevPAR (revenue per available room) and how that accelerates with the data:
- 1 Bedroom: £16,800 per room
- 2 Bedroom: £10,500 per room
- 3 Bedroom: £8,533.33 per room
- 4 Bedroom: £9,000 per room
- 5 Bedroom: £9,640 per room
As you can see, as you move from 1 to 3 beds, the revenue per room decreases, but with the shift from 3 to 5 bedrooms, you start to see that figure increase again.
Sykes’ data covers properties up to five bedrooms; the income potential for genuinely large houses, estates and multi-unit sites is likely to be higher still, particularly where properties command premium nightly rates and attract group bookings for celebrations, reunions and corporate retreats. Worth noting that those group types may have a higher percentage of adult guests and therefore may be willing to pay more for their stay. A three-bed property may be most appealing to a single-family unit, but parents may (understandably) be less willing to spend more for children’s rooms.
The gap between property sizes also reinforces a fundamental point about the economics of larger lets. Running costs are higher, certainly — cleaning, maintenance, utilities, linen — but the revenue ceiling is substantially higher too. Owners who invest in maintaining quality at the larger end of the market are operating in a segment with strong earning potential and relatively less competition.
The Regions Performing Best Reward Year-Round Appeal
The Cotswolds retained its position as the highest-earning holiday home region for a second consecutive year, with owners averaging £30,600 in gross income. The specific villages driving that number are instructive:
- Stow-on-the-Wold at £41,600
- Bourton-on-the-Water at £37,500
- Burford at £34,100
These are locations with strong year-round tourism infrastructure — good restaurants, accessible countryside, cultural attractions — rather than places that depend solely on a summer peak.
Cumbria and the Lake District moved into second place (£28,400 average), overtaking the Highlands and Islands (£28,000). Within the Lake District the highest earning holiday home regions:
- Grasmere stands out at £45,900 — the single highest-earning location in the report by a considerable margin.
- Bowness-on-Windermere at £36,200
- Coniston at £35,700
- Ambleside at £34,800
The Peak District ranked fourth nationally (£26,900 average), with Castleton producing the second-highest location-level income in the entire report at £38,200. Matlock (£34,000) also featured prominently, with a 14% year-on-year increase in bookings per property.
For owners of larger group properties, it’s worth noting that the locations generating the best returns are not necessarily the most famous coastal destinations. They are countryside and heritage locations with broad seasonal appeal — places where walking, food, culture and landscape draw visitors throughout the year, not just during school holidays. This matters particularly for large properties, where shoulder-season and off-peak bookings at group rates can make a meaningful difference to annual income.
The Top 10 UK Holiday House Hotspots — And What They Share
Sykes identified ten specific hotspots based on a combination of average annual income, occupancy rates and recent booking trends:
- Matlock (Derbyshire)
- Warkworth (Northumberland)
- Castleton (Derbyshire)
- Chester (Cheshire)
- Durham (County Durham)
- Grasmere (Cumbria)
- Ambleside (Cumbria)
- Bowness-on-Windermere (Cumbria)
- Hunstanton (Norfolk)
- Aldeburgh (Suffolk).
Several of these locations saw double-digit growth in bookings per property. Durham recorded a 19% increase, Warkworth 15%, Matlock 14%, and both Chester and Aldeburgh 12%. What unites them is not a single property type or price bracket but a set of shared characteristics: proximity to natural or cultural attractions, strong tourism infrastructure, and — critically — appeal that extends beyond the summer months.
Chester is a particularly interesting inclusion for group accommodation owners. Its combination of heritage, retail and dining in a compact city centre supports reliable short-break demand across multiple visitor types — from couples to corporate groups to multi-generational families. It also has good proximity to both Manchester and Liverpool, great destinations for both stag and hen parties, and sporting groups.
Historic cities of this kind represent a great opportunity for larger properties. A five-bedroom townhouse within walking distance of Chester’s centre, for example, occupies a very different market position from a rural cottage, but the underlying demand dynamics are strong.
Flexibility Is Now Essential, Not Optional
One of the most commercially significant findings in the report concerns booking flexibility. Owners who accept short breaks and multiple bookings within a single week generate, on average, eight additional bookings and 25% more revenue per year compared to those with rigid changeover patterns.
For owners of larger properties, where weekly rates are higher, but occupancy can be harder to fill consistently, the implications are significant. A six-bedroom property that sits empty from Monday to Friday because the owner only accepts Saturday-to-Saturday bookings is leaving considerable income unrealised. Accepting a Thursday-to-Sunday booking from one group and a Monday-to-Wednesday booking from another in the same week requires more operational effort — more changeovers, more communication — but the revenue impact could be material.
The report also reveals strong demand for last-minute bookings, consistent with Sykes’ earlier data showing that over 30% of bookings in Q1 of recent years were made within 14 days of arrival. For larger properties that tend to be booked further in advance for peak dates, maintaining availability and visibility for last-minute shoulder-season stays is a practical way to improve annual occupancy, provided you have the operational setup to prepare the property for late and last-minute bookings.
The locations with the highest average bookings per property in 2025 reinforce the flexibility point. Castleton led with 51 bookings per year, followed by Matlock and Haworth (both 46), Stow-on-the-Wold (44) and Llangollen (43). These are all accessible, year-round destinations where short breaks and midweek stays are a natural fit. Properties in these areas that accommodate groups — walking parties, friend reunions, small corporate away-days — are well-positioned to benefit from this trend, provided they can remain operationally flexible.
We speak to large property owners daily, and we appreciate that staffing can be an issue, particularly in the low seasons (or the height of summer!), but as the industry shifts, property owners must stay ahead of the trends.
Hot Tubs, Pets And The Amenities That Shift STR Revenue
The report quantifies three specific factors that correlate with higher income.
Hot Tubs Can Drive a 40% Uplift In Holiday Home Revenue
Properties with a hot tub earn, on average, 40% more per year. That is a consistent finding across Sykes’ data and aligns with similar figures from other industry reports. For larger properties, where the per-night rate is already higher, a 40% uplift represents a significant absolute increase in revenue. The installation cost of a hot tub is meaningful but typically recoverable within a year or two of improved bookings (and do keep in mind the maintenance required).
Pet-Friendly Holiday Homes Drive 16% Higher Revenue
Pet-friendly properties earn, on average, eight more bookings and 16% more revenue per year than those that do not accept pets. Sykes noted that more dogs than children holiday with them each year — a striking statistic that underscores the scale of this market segment. For owners of larger properties with gardens and outdoor space, accepting dogs is relatively straightforward to implement. Providing a few thoughtful extras — a dog bed, treats, and information about local walks — can drive positive reviews and repeat bookings.
When asked about the most common improvements they had made to drive bookings, owners cited
- Upgraded technology or entertainment (32%),
- Refreshed interiors (29%)
- Improved outdoor spaces (25%)
These are relatively low-cost interventions compared to structural changes. For larger properties, where guest expectations are often higher, and groups tend to spend more time in the property itself (cooking together, socialising), the quality of the kitchen, living spaces and outdoor areas can be a decisive factor in whether a guest recommends the property or books again.
Seasonal Income Is More Balanced Than Many Assume
The report breaks down average income by season:
- Spring: £7,070
- Summer: £7,060
- Winter: £6,110
- Autumn: £5,330.
The near-parity between spring and summer is notable. It suggests that for well-positioned properties, the traditional summer peak is no longer the overwhelmingly dominant revenue period it once was.
For owners of large group properties, this is encouraging. Group bookings — birthday celebrations, milestone anniversaries, walking weekends, corporate retreats — are not confined to July and August. Many of these occasions happen throughout the year, and groups are often more flexible on dates than families tied to school holidays.
Business retreats and company off-sites in particular are less likely to happen in the summer months, as many companies will be up against their team members taking their own summer holidays. These booking types can be an excellent source of mid and low season bookings for larger properties, particularly those that offer en-suite rooms or options for onsite catering.
Owners who actively market their properties for autumn and winter group stays, highlighting features like log burners, games rooms and proximity to good pubs, can capture a share of this increasingly year-round demand.
The Regulatory Landscape Is Creating Concern — But Also Opportunity
The report addresses the regulatory changes that have affected holiday let owners in recent years, including the abolition of the Furnished Holiday Lettings tax relief in April 2025, the introduction of council tax premiums in some areas, and forthcoming statutory licensing schemes.
When asked about their top concerns, owners cited rising operational costs first, followed by cost-of-living pressures affecting tourist numbers, higher council taxes, statutory licensing, and tourism levies.
Despite these concerns, 83% of UK holiday let owners remain confident in the future profitability of their investment, and 60% expect demand to increase over the next year.
For owners of larger properties, the regulatory environment creates a degree of competitive advantage. Properties that qualify for business rates (by meeting the required threshold of days let and available) are not affected by council tax premiums designed for second homes. Larger, professionally managed group properties that are genuinely available for letting throughout the year are more likely to meet these thresholds than occasionally-let second homes. The distinction between a genuine holiday letting business and an underused second home is one that regulatory frameworks are increasingly drawing, and owners who operate their properties as serious letting businesses stand to benefit from this clarity.
The Holiday Home Owner Profile Is Changing
The report reveals that the average holiday let owner in 2025 is 38 years old, male, with three years of experience owning a cottage. That is younger than many might expect. 76% of owners have a full-time job alongside their holiday letting business, and 18% are new to the industry, having started within the last year.
The fastest-growing property types on the Sykes platform were unique properties (castles, lighthouses and similar), glamping accommodation (huts, pods, yurts), and apartments. The growth in unique properties is particularly relevant for the group accommodation market, where distinctiveness is often a key driver of bookings. Guests choosing a large property for a group celebration are frequently looking for something memorable — a place that becomes part of the story of the trip itself.
The top motivations for holiday letting were investment for future finances, generating income during retirement, and sharing a location with others to encourage visitors to the area. For owners of larger properties that may have been in the family for generations — estates, farmhouses, historic buildings — the third motivation is worth noting. There is a growing cohort of owners who view holiday letting not purely as a financial exercise but as a way of sustaining a property and contributing to the local economy.
What STR Owners Are Doing To Adapt
The report outlines the practical steps owners are taking to protect and grow their income.
- 37% are making their property available for more days to increase income.
- 37% are investing in improvements.
- 27% are switching energy suppliers or installing energy-saving technology.
- 26% are turning to agencies or platforms to drive more bookings.
- 24% are registering for business rates.
When it comes to driving bookings during the off-season, specifically:
- 42% are using discounts and price promotions
- 41% are improving amenities
- 36% are increasing marketing activity
- 35% are targeting new types of guests
- 32% are accepting short breaks.
For owners of larger group properties, the most actionable insight here is the combination of flexibility and targeted marketing. A large property in a year-round destination that accepts short breaks, welcomes dogs, has a hot tub and is actively marketed to specific guest types — walking groups in autumn, corporate retreats in January, multi-generational families at Easter — is positioned to capture demand across all four seasons.
The properties that struggle are those with rigid booking patterns, limited availability and a passive marketing approach.
What We Take From This At GroupAccommodation.com
We have been in the large holiday rental market for over twenty years, and the Sykes report confirms several trends we see reflected in our own data and conversations with property owners.
- The market is growing. Demand is strong and broadening. Guests are willing to pay for quality, particularly in larger properties where the per-person cost is often very reasonable even at premium nightly rates. The properties that perform best are those in year-round destinations, run with operational flexibility, maintained to a high standard, and marketed with clarity about who they are for and what makes them worth booking.
- The income data by property size is the most important takeaway for our audience. A five-bedroom property averaging £48,200 in gross income sits in a fundamentally different economic category from a two-bedroom cottage at £21,000. For owners of properties that sleep eight, twelve, sixteen or more, the potential is higher still — provided the property, the listing and the guest experience justify the rate.
- Flexibility is increasingly important. Guests are booking later and for shorter breaks. The days of the 7-night Saturday-to-Saturday booking may not be completely behind us (particularly in peak season), but operators that are able to accommodate later and last-minute bookings for shorter periods will have a strategic advantage in this market.
If you own a large property and want to understand how it fits within this market, or if you are considering whether to list a property for group accommodation, we’d be happy to chat. You can find out more below.
Drive Direct Bookings For Your Group Accommodation
GroupAccommodation.com works with thousands of large holiday homes across the UK and Europe to help them drive direct bookings.
Data and findings referenced in this post are drawn from the Sykes Holiday Cottages Holiday Letting Outlook Report 2026, based on internal bookings, revenue and website data from 2022–2025, supplemented by consumer research of 500 holiday let owners conducted by 3Gem in December 2025.
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